A lot of what we’re seeing in the news recently with public markets not being receptive to the latest wave of tech IPO’s is ultimately the result of quasi-IPO’s that have been led in the private markets as a result of significant later stage funding from conglomerates like Softbank and crossover firms like TRowe and Fidelity. This is an upward bias at its finest and cracks are starting to show in the thinking.
The public markets in general are not buying the valuations here (Uber, WeWork, SmileDirect, etc) and there’s a general lack of excitement in IPO’s recently by retail investors. This is because most of the value creation has happened in the private markets so the days of thinking you can capture significant upside is waning. Amazon had raised only $8m from KCPB before going public in 1997. Compare that to how much Uber (or WeWork) have raised privately. It’s possible as a retail investor to have made incredible returns because the real value capture happened in the public markets.
Whereas in 1999, the public markets got hit the hardest with overvalued tech companies, it appears now the private markets are having their own dot.com style crash.